Taking Stock of Education Dept. Appointment

Submitted by Doug Lederman on April 22, 2009 - 3:00am

Robert Shireman has long been a force in Washington, even when he's lived outside the Beltway. But he had probably never been a major player on Wall Street -- until Tuesday, when his appointment to a key post[1] in the U.S. Education Department drove down the stocks of the publicly traded for-profit higher education companies. Shireman has occasionally criticized for-profit colleges during his years as an advocate for low-income students and college access, and some analysts of the commercial college sector anticipate that he will ramp up regulation of the industry. On Tuesday, after Education Secretary Arne Duncan named Shireman to a new position as deputy under secretary, an analyst at Credit Suisse downgraded its rating for several postsecondary companies in light of the possibility of more legal or regulatory changes "that could adversely impact for-profit education sector growth more significantly." Career college officials played down any such possibility, with the head of the Career College Association, Harris Miller, saying in a comment posted on this Web site[2] that its colleges have "worked constructively with Bob Shireman over the years, and we look forward to his assuming his new role." Still, the stocks of the publicly traded higher ed companies fell by between 5 and 10 percent in value. Interestingly, the stock of Sallie Mae -- which has unquestionably been a target of Shireman's over the years -- actually rose[3] Tuesday.